1 Unless otherwise indicated, all section references are to

the Internal Revenue Code in effect for the tax year in issue,

and all Rule references are to the Tax Court Rules of Practice

T.C. Memo. 1996-220

UNITED STATES TAX COURT

JANET KLINE, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 15500-92. Filed May 7, 1996.

Peter Driscoll, for petitioner.

Diane D. Helfgott, for respondent.

MEMORANDUM OPINION

PANUTHOS, Chief Special Trial Judge: This case was heard

pursuant to the provisions of section 7443A(b)(3) and Rules 180,

181, and 182.1 Respondent determined additions to petitioner's
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and Procedure.

1984 income tax, pursuant to section 6653(a)(1) and (2), in the

amounts of $200 and $2,756, respectively. The additions to tax

are attributable to a partnership loss from the American Indian

Venture Capital Partnership (the partnership) that was claimed on

the 1983 joint income tax return and carried forward to the 1984

return. The underlying adjustments relating to the partnership

were resolved in American Indian Venture Capital v. Commissioner,

docket No. 17697-87. A timely petition was filed in response to

the statutory notice issued on April 3, 1992. At the time of

filing the petition herein, petitioner resided in Ellicott City,

Maryland.

Petitioner, through her attorney, Peter Driscoll, filed a

petition for redetermination on July 9, 1992. Petitioner argued

that she is not liable for the additions to tax because she is an

innocent spouse within the meaning of section 6013(e). 

Petitioner also argues that the statute of limitations bars

assessment and collection of the tax.

On September 4, 1992, respondent filed an answer to the

petition in which she denied all substantive allegations of fact

and error and affirmatively alleged as a defense that the statute

of limitations does not bar assessment and collection of the

deficiency due for the taxable year 1984. Respondent alleged as

follows:
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(a) The notice of deficiency at issue herein

asserts additions to tax arising from the loss claimed

by petitioner and Frank Kline as their distributive

share of the partnership loss reported by American

Indian Venture Capital Partnership for the taxable

year 1983.

(b) Petitioner and Frank Kline claimed a loss from

American Indian Venture Capital on their 1983 return

and carried forward a net operating loss based on the

1983 partnership loss to their 1984 return.

(c) The net operating loss claimed by petitioner

and Frank Kline on their 1984 return is an affected

item as defined by 6231(a)(5), arising from the

partnership loss reported by American Indian Venture

Capital Partnership for the taxable year 1983. Maxwell

v. Commissioner, 87 T.C. 783, 790 (1986).

(d) The notice of deficiency at issue herein

asserts additions to the tax for the taxable year 1984

arising from the partnership loss carried forward by

petitioner and Frank Kline from 1983 to 1984.

(e) These additions to tax asserted by respondent

are also affected items as defined in I.R.C. 6231(a)(5)

and Treas. Reg. 301.6231(a)(5) - 1(d) arising from the

partnership loss claimed by American Indian Venture

Capital for the taxable year 1983.

(f) Pursuant to I.R.C. 6501(o)(2) and 6229(g), the

applicable period of limitations for the assessment of

additions to tax arising from partnership items is

provided by I.R.C. 6229.

(g) American Indian Venture Partnership filed its

1983 partnership return of income on April 15, 1984.

(h) A notice of partnership administrative

adjustment setting forth respondent's determination of

the adjustments to partnership items for American

Indian Venture Capital for the taxable year 1983 was

mailed to each partner on March 16, 1987, which date

was prior to the expiration of the three-year period

for assessment and collection under I.R.C. 6229(a).

(i) A timely petition contesting the partnership

adjustments was filed on June 12, 1987.
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(j) A decision was entered on January 17, 1991,

and became final on April 16, 1991.

(k) A notice of deficiency was mailed to

petitioner with respect to the additions to the tax

affected items on April 3, 1992, which date was prior

to the expiration of the one-year period for assessment

and collection under I.R.C. 6229(f).

On September 4, 1992, respondent served a copy of her answer

upon Attorney Driscoll. On November 5, 1992, respondent filed a

motion for entry of an order that the undenied allegations in her

answer be deemed admitted in accordance with Rule 37(c). 

Attorney Driscoll was served with a copy of the motion. Also on

November 5, 1992, Attorney Driscoll was served with a notice from

the Clerk of the Court that respondent had filed a motion for

entry of an order. The notice indicated that

If petitioner files a reply as required by Rule

37(a) and (b) of this Court's Rules on or before

November 27, 1992, respondent's motion will be denied. 

If petitioner does not file a reply as directed herein,

the Court will grant respondent's motion and deem

admitted for purposes of this case the affirmative

allegations in the answer.

No reply was filed by petitioner, and, accordingly, respondent's

motion was granted on December 7, 1992.

This case was originally set for trial on October 12, 1993. 

Respondent filed a motion for continuance which was granted by

the Court on August 19, 1993. The case was then set for trial on

October 11, 1994. Respondent filed a motion for continuance

which was granted by the Court on August 22, 1994. The two

motions to continue referred to related cases under submission
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involving the deductibility of petitioner's claimed partnership

losses.

On June 23, 1995, a notice setting this case for trial on

September 11, 1995, in Baltimore, Maryland, along with a Standing

Pre-Trial Order, were served upon Attorney Driscoll. The notice

clearly indicated that "YOUR FAILURE TO APPEAR MAY RESULT IN

DISMISSAL OF THE CASE AND ENTRY OF DECISION AGAINST YOU". On

August 18, 1995, approximately 3 weeks before the date set for

trial of this matter, respondent filed a motion for an order to

show cause why judgment should not be entered against petitioner

on the basis of Kline v. Commissioner, T.C. Memo. 1994-397. By

order dated August 21, 1995, petitioner was ordered to "show

cause in writing on or before September 6, 1995, why respondent's 

* * * motion should not be granted and a decision entered in

accordance therewith." Attorney Driscoll was served with a copy

of this order on August 22, 1995. No response was filed to the

order to show cause.

When the case was called for trial on September 11, 1995,

neither petitioner nor Attorney Driscoll appeared or otherwise

communicated with the Court. Counsel for respondent appeared at

the hearing.

In Kline v. Commissioner, supra, the Court considered

whether petitioner was entitled to relief as an innocent spouse

for the additions to tax determined for the 1982 and 1983 tax

years. The additions to tax were attributable to a partnership
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2 The partnership, American Indian Venture Capital

Partnership, is the identical partnership involved in this case.

loss claimed in 1983 and carried back to 1982.2 We held that

petitioner was not entitled to relief as an innocent spouse

because she had failed to prove that she satisfied the lack of

knowledge requirement pursuant to section 6013(e). We did not

address whether petitioner had satisfied the remaining

requirements of section 6013(e).

Discussion

As in the prior case, Kline v. Commissioner, supra, the

additions to tax here are affected items. Saso v. Commissioner,

93 T.C. 730, 734 (1989). It is well established that the

Commissioner's deficiency determination carries with it a

presumption of correctness, and the taxpayer bears the burden of

proving that the determination is erroneous. Rule 142(a); Welch

v. Helvering, 290 U.S. 111 (1933).

Our Rules provide that the failure of a party to appear at

trial may result in entry of decision against that party. 

Specifically, Rule 123 provides in pertinent part:

(b) Dismissal: For failure of a petitioner

properly to prosecute or to comply with these Rules or

any order of the Court or for other cause which the

Court deems sufficient, the Court may dismiss a case at

any time and enter a decision against the petitioner. 

* * * 
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Dismissal of a case is a sanction resting in the sole

discretion of the trial court. Harper v. Commissioner, 99 T.C.

533, 540 (1992). Furthermore--

Dismissal may properly be granted where the party's

failure to comply with Rules and orders of the Court is

due to "willfulness, bad faith or any fault", as

contrasted with mere inadvertence or inability. 

Societe Internationale v. Rogers, 357 U.S. 197, 212

(1958)(Fed. R. Civ. P. 37(b)(2)); Dusha v.

Commissioner, 82 T.C. 592, 599 (1984) (Rule 104(c)). A

case may be dismissed for failure properly to prosecute

when petitioner, or counsel on petitioner's behalf,

fails to appear at trial and does not otherwise

participate in the resolution of petitioner's claim. 

Basic Bible Church v. Commissioner, 86 T.C. 110, 114

(1986). [Id.]

We look to the legal standards for dismissal under rule

41(b) of the Federal Rules of Civil Procedure as guidance for

involuntary dismissals in the Tax Court under our Rule 123(b). 

Basic Bible Church of America v. Commissioner, 86 T.C. 110, 113

(1986). The Court of Appeals for the Fourth Circuit, to which

dismissal of this case would be appealable, has held that a court

considering whether to dismiss a case under rule 41(b) of the

Federal Rules of Civil Procedure for failing to prosecute must

consider the following factors: 

"(1) the degree of personal responsibility of the

plaintiff, (2) the amount of prejudice caused the

defendant, (3) the existence of a 'drawn out history of

deliberately proceeding in a dilatory fashion' and (4)

the existence of sanctions less drastic than

dismissal." [Herbert v. Saffell, 877 F.2d 267, 270 (4th

Cir. 1989) (quoting Chandler Leasing Corp. v. Lopez,

669 F.2d 919, 920 (4th Cir. 1982)).]
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Applying these factors we conclude that dismissal of this

case is proper under Rule 123(b). With respect to the first

factor, petitioner is responsible for Attorney Driscoll's actions

under ordinary principles of agency. Link v. Wabash R.R., 370

U.S. 626, 633-634 (1962); Doyle v. Murray, 938 F.2d 33, 35 (4th

Cir. 1991) ("But this must always be done with an eye to the

realities of a client's practical ability to supervise and

control his attorney's litigation conduct."). As indicated,

petitioner filed her petition with this Court through Attorney

Driscoll. We do not know the circumstances surrounding this

attorney-client relationship; nevertheless, petitioner had an

obligation to inquire about the status of her case. Petitioner

is not unfamiliar with the proceedings of this Court, as

evidenced by the previous case litigated.

The remaining factors also warrant dismissal. Respondent

would be prejudiced if we were to continue this case for trial on

another date, particularly in light of the fact that petitioner

has not requested a continuance. In spite of this Court's

warning in its notice setting this case for trial and its

pretrial order, petitioner failed to appear at the hearing and

trial on September 11, 1995. Petitioner also failed to show

cause why judgment should not be entered in accordance with Kline

v. Commissioner, supra. Finally, we believe that dismissal is

warranted because petitioner has, through her own fault, failed

to properly prosecute her case. Accordingly, we discharge the
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order to show cause, and we dismiss this case pursuant to Rule

123(b), and we sustain respondent's determination respecting the

additions to tax.

To reflect the foregoing,

 An order of dismissal and

 decision for respondent will be

 entered.